Drinks group Diageo posted a rise in half-year earnings and raised its full year growth guidance despite some tough markets and a weakening dollar that dragged on profits.
The company said it had seen underlying earnings for its half year (July-December 2006) rise to 34.4 pence a share using an effective tax rate of 25 per cent from 31.1p a year ago.
Net sales rose to £4 billion from £3.96 billion, while operating profit rose to £1.3 billion from £1.26 billion.
The drinks maker upped its guidance for organic operating profit growth for the full year to 8 per cent from its previous forecast of at least 7 per cent.
Diageo said North America, Latin America and Asia had helped growth, but European sales had been soured by the waning popularity of Smirnoff Ice-type alcopops, fewer pints of Guinness being drunk in Ireland and Spaniards losing the taste for scotch whisky.
The company reaffirmed its £1.4 billion share buyback programme for this year and said it planned to buy a further £1 billion of shares back next year.
Diageo warned that exchange rates, largely dollar weakness, would knock full-year operating profit by £90 million - although it would also reduce interest charges by £10 million.